Natural Gas Price Forecast – Natural Gas Markets Pull Back

Natural gas markets have pulled back significantly from the top of the range, so therefore it is likely that we are going to go looking towards the $3.00 level. The $3.00 level of course is a large, round, psychologically significant figure, so looking at this chart you would expect there to be a certain amount of support in this area. However, if we break down below the little bit of consolidation underneath that area then we may finally go looking towards the gap underneath which eventually will get filled. After all, futures markets do like to fill gaps given enough time although it does take a while.

NATGAS Video 19.05.21

To the upside, the $3.20 level continues to be an area where it is significant resistance and therefore, I think the fact that we have pulled back from there should continue to show a lot of resistance in that area as well. All things been equal, the fact that we have given back so much of the gains so quickly tells me that the market has gotten ahead of itself. Yes, the natural gas markets are getting a bit of a boost from the commodity boom in general, but at the end of the day demand for natural gas will not be anywhere near as high as it will be for other commodities. With this being the case, the market is likely to be the first one to break down so at this point I believe I am looking for a selling opportunity if we can get below the $2.90 level or so. If that happens, I believe that will be the first sign that we are going to fill that gap.

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